-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, M9mWbumncr1QStmNBzCNfqgxcwHe5/t5EsIbUPQZXPaL9T7jZA8sOIquPikyG21N pb9uiCkAjY1D3ytjir575Q== 0000084748-94-000026.txt : 19941117 0000084748-94-000026.hdr.sgml : 19941117 ACCESSION NUMBER: 0000084748-94-000026 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941002 FILED AS OF DATE: 19941114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROGERS CORP CENTRAL INDEX KEY: 0000084748 STANDARD INDUSTRIAL CLASSIFICATION: 2821 IRS NUMBER: 060513860 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04347 FILM NUMBER: 94560132 BUSINESS ADDRESS: STREET 1: ONE TECHNOLOGY DR STREET 2: P.O. BOX 188 CITY: ROGERS STATE: CT ZIP: 06263-0188 BUSINESS PHONE: 2037749605 10-Q 1 ROGERS CORPORATION 3RD QUARTER 10-Q Total pages included - 12 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 2, 1994 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-4347 ROGERS CORPORATION (Exact name of Registrant as specified in its charter) Massachusetts 06-0513860 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) One Technology Drive, Rogers, Connecticut 06263 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (203) 774-9605 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of the Registrant's classes of common stock as of October 30, 1994: Capital Stock, $1 Par Value--3,516,995 shares -1- [PAGE] ROGERS CORPORATION AND SUBSIDIARIES FORM 10-Q October 2, 1994 INDEX Page No. PART I--FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited): Consolidated Statements of Income-- Three Months and Nine Months Ended October 2, 1994 and October 3, 1993 3 Consolidated Balance Sheets-- October 2, 1994 and January 2, 1994 4-5 Consolidated Statements of Cash Flows-- Nine Months Ended October 2, 1994 and October 3, 1993 6 Supplementary Notes 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-10 PART II--OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 11 SIGNATURES 12 -2- [PAGE] PART I - FINANCIAL INFORMATION ITEM I. FINANCIAL STATEMENTS ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands Except for Per Share Amounts)
Three Months Ended: Nine Months Ended: ---------------------------------------------------------- October 2, October 3, October 2, October 3, 1994 1993 1994 1993 ---------------------------------------------------------- Net Sales $ 32,605 $ 30,312 $ 101,605 $ 94,030 Cost of Sales 23,451 21,821 73,658 67,694 Selling and Administrative Expenses 4,714 4,954 14,967 14,695 Research and Development Expenses 1,724 1,706 5,037 5,114 ---------------------------------------------------------- Total Costs and Expenses 29,889 28,481 93,662 87,503 ---------------------------------------------------------- Operating Income 2,716 1,831 7,943 6,527 Other Income less Other Charges 310 498 655 643 Interest Expense, Net 137 593 857 2,140 ---------------------------------------------------------- Income Before Income Taxes 2,889 1,736 7,741 5,030 Income Taxes Expense: Federal and Foreign 158 24 279 64 State 35 -- 108 1 ---------------------------------------------------------- Net Income $ 2,696 $ 1,712 $ 7,354 $ 4,965 ========================================================== Net Income Per Share: Primary $ .73 $ .53 $ 2.10 $ 1.57 ========================================================== Fully Diluted $ .73 $ .53 $ 2.09 $ 1.54 ========================================================== Average Shares Outstanding: Primary 3,685,842 3,210,166 3,499,429 3,154,951 ========================================================== Fully Diluted 3,694,513 3,236,623 3,524,305 3,233,233 ========================================================== The accompanying notes are an integral part of the consolidated financial statements.
-3- [PAGE] ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS (Dollars in Thousands) October 2, 1994 January 2, 1994 ---------------- --------------- Current Assets: Cash and Cash Equivalents $ 7,786 $ 4,533 Accounts Receivable 19,241 15,008 Inventories: Raw Materials 4,247 3,432 In-Process and Finished 4,780 5,404 Less LIFO Reserve (808) (808) ----------- ---------- Total Inventories 8,219 8,028 Current Deferred Income Taxes 1,918 1,820 Net Assets Held for Sale (Note D) 6,785 6,785 Prepaid Expenses 414 668 ----------- ---------- Total Current Assets 44,363 36,842 ----------- ---------- Property, Plant and Equipment, Net of Accumulated Depreciation of $59,831 and $54,271 33,626 36,807 Investments in Unconsolidated Joint Ventures 3,610 3,051 Intangible Pension Asset 3,295 3,295 Other Assets 1,670 1,842 ----------- ---------- Total Assets $ 86,564 $ 81,837 =========== ========== The accompanying notes are an integral part of the consolidated financial statements. -4- [PAGE] ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - CONTINUED LIABILITIES AND SHAREHOLDERS' EQUITY (Dollars in Thousands) October 2, 1994 January 2, 1994 ---------------- --------------- Current Liabilities: Accounts Payable $ 7,660 $ 7,679 Current Maturities of Long-Term Debt 1,225 3,140 Accrued Employee Benefits and Compensation 5,302 5,296 Accrued Cost Reduction Charge 1,344 2,222 Other Accrued Liabilities 4,621 3,800 Taxes, Other than Federal and Foreign Income 1,020 1,546 ---------- ---------- Total Current Liabilities 21,172 23,683 Long-Term Debt, less Current Maturities 6,675 14,190 Noncurrent Deferred Income Taxes 2,271 2,055 Noncurrent Pension Liability 5,660 5,660 Noncurrent Retiree Health Care and Life Insurance Benefits 6,122 6,122 Other Long-Term Liabilities 2,526 2,236 Shareholders' Equity: Capital Stock, $1 Par Value: Authorized Shares 25,000,000; Issued and Outstanding Shares 3,515,320 and 3,222,461 3,515 3,222 Additional Paid-In Capital 28,432 22,558 Equity Translation Adjustment 1,920 1,193 Retained Earnings 8,271 918 --------- --------- Total Shareholders' Equity 42,138 27,891 --------- --------- Total Liabilities and Shareholders' Equity $ 86,564 $ 81,837 ========= ========= The accompanying notes are an integral part of the consolidated financial statements. -5- [PAGE] ROGERS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands)
Nine Months Ended: --------------------------- October 2, October 3, 1994 1993 --------------------------- CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net Income $ 7,354 $ 4,965 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and Amortization 5,000 5,576 Equity in Undistributed (Income) Loss of Unconsolidated Joint Ventures - Net 28 (484) Gain (Loss) on Disposition of Property, Plant & Equipment 30 (5) Other - Net (449) 230 Changes in Operating Assets and Liabilities Excluding Effects of Acquisition and Disposition of Assets: Accounts Receivable (3,941) (2,795) Accounts Receivable from Unconsolidated Joint Ventures (638) 339 Inventories (105) 1,004 Prepaid Expenses 283 (129) Accounts Payable and Accrued Expenses (925) 288 ---------------------------- Net Cash Provided by Operating Activities 6,637 8,989 CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Capital Expenditures (2,851) (6,259) Proceeds from Sale of Businesses 909 10,634 Proceeds from Sale of Property, Plant and Equipment 1,664 224 ---------------------------- Net Cash Provided by (Used in) Investing Activities (278) 4,599 CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Proceeds from Short and Long-Term Borrowings 1,250 6,956 Repayments of Debt Principal (6,153) (19,478) Net Increase in Repayments of Revolving Lines of Credit -- (3,539) Proceeds from Sale of Capital Stock 1,667 272 ---------------------------- Net Cash Used in Financing Activities (3,236) (15,789) Effect of Exchange Rate Changes on Cash 130 433 ---------------------------- Net Increase (Decrease) in Cash and Cash Equivalents 3,253 (1,768) Cash and Cash Equivalents at Beginning of Year 4,533 5,356 ---------------------------- Cash and Cash Equivalents at End of Quarter $ 7,786 $ 3,588 ============================ The accompanying notes are an integral part of the consolidated financial statements.
-6- [PAGE] ROGERS CORPORATION AND SUBSIDIARIES SUPPLEMENTARY NOTES A. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the audited consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the fiscal year ended January 2, 1994. B. Beginning with the third quarter of 1993, sales include flexible circuit material sales to ADFlex Solutions, Inc., the company that purchased Rogers' flexible interconnections business in June 1993. C. In February 1994 the Company concluded an agreement to sell its U.S. power distribution business to Methode Electronics, Inc., a manufacturer of bus bar products located in Chicago, Illinois. In addition to an initial cash payment, the Company will receive royalties on sales for five years. The sale has been completed. The plant, where the business was operating, located in Mesa, Arizona, is being offered for sale. D. Net Assets Held for Sale consist primarily of land and building in Chandler, Arizona, currently being leased to the buyer of the Flexible Interconnections Division and the land and building in Mesa, Arizona, related to the divested Power Distribution Division. E. The Company has a $15.0 million revolving credit arrangement with Fleet Bank, N.A. At October 2, 1994, there were no borrowings under this arrangement. F. Interest paid to lenders during the first nine months of 1994 and 1993 was approximately $1,769,000 and $2,679,000, respectively. G. Income taxes paid were $290,000 and $162,000 in the first nine months of 1994 and 1993, respectively. -7- [PAGE] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Net Income in the third quarter and first nine months of 1994 was $2.7 million and $7.4 million, respectively, as compared with $1.7 million and $5.0 million in the same periods of 1993. Profits, both before and after taxes, were the largest for any third quarter and any initial nine-month period in Rogers history. 1994 before-tax profits increased 66% in the third quarter, and 54% in the first nine months, compared with the same periods a year ago. Increased sales, especially in flexible circuit materials and in the European power distribution component business, and significantly lower interest costs were the major reasons for the third quarter year-to-year profit improvement. In addition, 1994 third quarter earnings included a modest gain from the sale in September of Rogers small ENVEX (registered trademark) polyimide components business to DuPont. After-tax profits included only a nominal tax provision in 1994 and 1993. The Company expects to use substantially all of its domestic tax loss carryforwards in 1994. In addition, there are approximately $6 million of tax credit carryforwards and other adjustments for which no tax benefit has been recorded. Recognition of tax benefits associated with these items is dependent on future taxable earnings. The Company currently anticipates a tax rate in the range of 10% - 20% for the full year 1995. Durel Corporation, the Company's 50% owned joint venture with 3M for electroluminescent lamps, followed up its first full year of profits in 1993 with a stronger performance in the first nine months of 1994. Because aggregate losses during Durel's development period from 1988 to 1992 exceed aggregate earnings, Durel profits have not yet been reflected in Rogers financial statements. It is now expected, however, that a 50% share of Durel 1995 earnings will be included in Rogers results beginning in the first quarter of 1995. In response to additional growth opportunities, Durel broke ground in September for a 77,000 square foot manufacturing facility in Chandler, Arizona. Initial production in the new facility is planned for the spring of 1995. Sales were 8% greater in both the third quarter and in the first nine months, compared with the same periods last year. Adjusted to reflect divestitures, the sales gain was 14% in the quarter and 7% for the first three quarters. The sales gain was attributable mainly to higher unit sales as opposed to increased selling prices. Sales of Polymer Products increased 7% in the first nine months of 1994, compared with the same period in 1993. The Polymer Product sales increase was led by the Willimantic and Molding Materials Divisions. Sales of high performance elastomers benefited from continued strong growth of sales of Endur (registered trademark) C-LE conductive rollers for laser printer applications and from strong NITROPHYL (registered trademark) float sales to the automotive market. Volume increases in Molding Materials was attributable to robust automotive production, an increasing share of the electric motor commutator insulator market, and penetration of -8- [PAGE] foreign markets. Led by improving sales to printing and industrial markets, Poron Materials shipments were 10% greater in the third quarter of 1994 compared with the second quarter. In September, increased manufacturing capacity for PORON (registered trademark) S2000 silicone foam was approved, thereby extending the range of PORON product offerings to applications which require materials capable of performing at extreme temperatures. Sales of PORON materials and ENDUR components to Asian markets continue to increase. Stated in local currency, sales of Rogers INOAC Corporation, the Company's 50% owned joint venture in Japan, rose 36% in the third quarter compared with the same period last year. These joint venture sales are not recorded in Rogers' financial statements. Sales of Electronic Products for the initial nine-month period increased 9% compared with the prior year. Sales gains in flexible circuit materials for computer data storage applications and high frequency materials for cellular telephone base station applications more than offset lower sales of military microwave circuits. Considerable prototyping continued for commercial wireless applications, and the range of materials offered is being broadened. Additionally, sales in Europe ran well ahead of 1993 for the quarter and for the first nine months of the year. These results are attributable to sales for older applications in mainframe computers, where lower sales are expected in 1995, and from new applications both in power distribution devices for cellular telephone base stations and in large power equipment where further sales gains are anticipated. Manufacturing profit as a percentage of sales in the first nine months of 1994 was essentially unchanged compared with the corresponding period of 1993. Selling and administrative expenses for the first nine months of 1994 grew at a slower rate than the sales increase reflecting in part the impact of continuing expense reduction efforts. Research and development expenditures decreased slightly from 1993, but were approximately 5% of sales in both years. The Company is continuing to concentrate on spending for materials-related projects and is devoting an increased share of R&D resources to extend conductive elastomer technology for applications related to the imaging industry. Net interest expense for the first nine months of 1994 decreased from the comparative nine month period of 1993, as a result primarily of a reduction in total borrowing. Total debt outstanding at October 2, 1994 was $7.9 million compared with $19.3 million at October 3, 1993, a decrease of $11.4 million. The Company's debt was reduced $5.7 million in the third quarter, as a result of the conversion of $4.5 million convertible subordinated notes into 204,545 shares of capital stock, and regularly scheduled loan repayments of $1.2 million. As a result of lower borrowings, management expects 1994 interest expense will continue to decline. Net cash provided from operating activities in the first nine months of 1994 was $6.6 million, compared with $9.0 million in the same 1993 period. The year-to-year decrease is attributable mainly to increased working capital requirements associated with sales increases. -9- [PAGE] The Company can borrow up to a maximum of $15 million under a revolving credit arrangement with Fleet Bank, N.A. Amounts borrowed under this arrangement are to be paid in full on April 14, 1996. Repayments on the revolving credit facility are necessary to the extent the Company's collateral decreases to a level which does not support borrowings under the facility, although this is not likely. Borrowings under the revolving credit facility are secured by virtually all of the Company's domestic assets other than real property and intellectual property. The Company had no borrowings under this arrangement at October 2, 1994. Capital expenditures in the first half of 1994 and 1993 were $2.9 million and $6.3 million, respectively. The higher level of spending in 1993 reflected the acquisition and related costs of a new Poron production line, which more than doubled capacity of the Poron Materials Division. The Company is subject to federal, state, and local regulations concerning the environment and is currently engaged in proceedings involving a number of sites under these laws. In each of these cases, Rogers is one of a group of potentially responsible parties (PRPs). Several of these proceedings are at a preliminary stage and it is impossible to estimate the cost of remediation, the timing and extent of remedial action which may be required by governmental authorities, and the amount of liability, if any, of the Company alone or in relation to that of any other responsible parties. The Company also may have some insurance coverage with respect to these matters. Based on facts presently known to it, the Company does not believe that the outcome of these proceedings will have a material adverse effect on its financial condition. In addition to the above proceedings, the Company has been actively working with the Connecticut Department of Environmental Protection (CT DEP) related to polychlorinated biphenyl (PCB) contamination in the soil beneath a small section of cement flooring at the East Woodstock, Connecticut facility. The Company is developing a remediation plan with CT DEP. On the basis of estimates prepared by Rogers' environmental engineers and consultants, the Company recorded a provision of approximately $450,000 in the third quarter 1994 to cover the costs of this plan. Management believes, based on facts currently available, that the implementation of the aforementioned plan will not have a material additional impact on earnings. At October 2, 1994 other accrued liabilities were greater than year- end 1993 primarily as a result of reserves established for PCB clean- up. The Company has not had any material recurring costs and capital expenditures relating to the above environmental matters, except as specifically described above. -10- [PAGE] PART II - OTHER INFORMATION Item 6. Reports on Form 8-K (b) There were no reports on Form 8-K filed for the nine months ended October 2, 1994. EXHIBIT 11 - STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS Three Months Ended: Nine Months Ended: ---------------------------------------------- October 2, October 3, October 2, October 3, 1994 1993 1994 1993 ---------------------------------------------- 1. Net income $2,696,000 $1,712,000 $7,354,000 $4,965,000 ============================================== 2. Weighted average number of shares outstanding during period 3,508,534 3,114,355 3,338,326 3,110,965 3. Net effect of dilutive stock options - based on the treasury stock method using average market price 177,307 95,811 161,103 43,986 --------------------------------------------- 4. Total weighted average number of shares and capital equivalent shares assumed outstanding 3,685,842 3,210,166 3,499,429 3,154,951 5. Additional net shares, issuable when market value at period end exceeds average market value during period 8,671 26,457 24,876 78,282 --------------------------------------------- 6. Shares assumed outstanding for computation of fully diluted earnings per share 3,694,513 3,236,623 3,524,305 3,233,233 ============================================= Net income per capital share (1 / 2) $.77 $.55 $2.20 $1.60 ============================================= Net income per capital share and capital share equivalent (1 / 4) $.73 $.53 $2.10 $1.57 ============================================= Net income per capital share assuming full dilution (1 / 6) $.73 $.53 $2.09 $1.54 ============================================= This calculation is submitted in accordance with Regulation S-K Item 601(b)(11). -11- [PAGE] SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ROGERS CORPORATION (Registrant) By s/DONALD F. O'LEARY Donald F. O'Leary Authorized Officer Assistant Controller Dated: November 14, 1994 -12- [PAGE] EX-27 2 ROGERS CORP. 3RD QTR 1994 10-Q FDS
5 1,000 9-MOS JAN-01-1995 OCT-02-1994 758 7028 19241 0 8219 44363 93457 59831 86564 21172 0 3515 0 0 38623 86564 101605 101605 73658 93662 (655) 0 857 7741 387 7354 0 0 0 7354 2.10 2.09
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